On August 6, 2022, our Chief Operating Officer Thiranun “Tyra” Arunwattanakul joined an online talk hosted by Trader KP Talk to talk about micro-lending and its impact on the Thai economy. The session was enjoyable and full of insights into the micro-lending world, particularly in the new economy following COVID-19. Let us now read the summary.
Let’s Talk Micro-Lending and MONIX
The Bank of Thailand (BOT) provides a license for pico and nano loans. The credit limit is 50,000 and 100,000 Baht, respectively. These funds are intended to assist low-income individuals in gaining access to legal services. Borrowers would have enough liquidity to repay without feeling too much burdened, despite the fact that they appear small.
MONIX provides nano finance through the FINNIX application, which is a 100% digital app. Because the operating costs are lower, the company can use this margin to take on more risk and lend to more people. Furthermore, MONIX found that Thais are trapped in a cycle of loan shark debt. These people require immediate funds and have no idea whether the interest rate is high or low, or whether they will be able to repay. As a result, MONIX's goal is not only to provide them with legal funds, but also with financial knowledge. They are also provided with job opportunities where users can apply for jobs on the FINNIX app. The company wishes to develop a comprehensive customer journey that will assist them in becoming better people and having a better financial life.
"There are an estimated 36 million underbanked people, who do not have payslips to apply for traditional bank loans and have low income but do not meet the criteria for bank loan amount. MONIX's initial goal was to help at least 20% of the population, or 7.2 million people. For the risk assessment model, our FINNIX app only uses the ID card and alternative data. We use AI to personalize our risk assessment, and in the end, we are able to keep our NPL (non-performing loan) rate at an acceptable level." stated the COO.
A Company That Creates Opportunities
The vision of MONIX is to create opportunities for people. In terms of "opportunities," they can be further subdivided into various dimensions and vary according to each person's stage of life. The company's position is as an end-to-end digital platform that provides people with financial opportunities. The product lineup appears at the appropriate times. When the pandemic strikes in 2020, MONIX has developed digital lending. During that time, Thais, particularly the unbanked, lacked financial liquidity. The company tries to help and educate people on good financial habits and financial literacy, so they can have good financial health in the future.
"FINNIX represents hope; it is a bird that cannot be killed, and once it falls, it can rise again. We wanted to give those in the working class hope. We are a 100% legal lending application that takes 5 minutes to approve and requires fewer documents. We want to address the pain points of those who are underbanked and lack financial documents to access bank loans. Our app is 100% digital, data-driven, and uses AI and machine learning for the underwriting model. As a result, we approve loan applications quickly, within 5 minutes. And, the FINNIX app is now available on Huawei, iOS, and Android.” said Tyra.
FINNIX's nano loan, also known as FINNIX Bewinged, has been in service for over two years, with positive feedback. The app has over 550,000 nano loan customers and 1.1 million monthly active users. The app now offers a new personal loan service called "FINNIX Ignite," which has a higher credit limit of 1,500,000 Baht. Customers will receive personalized interest rates, with the lowest annual rate being 4.99%.
The COO of MONIX believes that the more micro-lending businesses emerge, the more people can get help, particularly those who are underbanked. But, if we want to help these people, we must make the risk assessment model very accessible; otherwise, we will be like traditional banks that reject them. This is yet another challenge in the lending industry.
MONIX, in her opinion, is customer-centric and does not focus on competitors. Its vision is to help people and creates opportunities. So, even though market competition is fierce, the company is content if it can achieve their aspirational vision. MONIX will differentiate itself from competitors by focusing on improving products and services and addressing customers' pain points.
A Journey From An Outsider to The Insider
The COO shared that prior to joining MONIX, she worked in the technology industry. Her experience has taught her that technology is meaningless if it cannot be integrated into a business. Because of the sensitivity of its nature, it is one of the most difficult businesses in the finance industry. As a result, she was very interested in the FinTech industry.
She learned throughout her journey is that running a startup requires a lot more ownership and accountability to customers, investors, and employees. She believes that what’s important is the fighting spirit, and not giving up easily on any obstacles that occur. This mindset is what would get anyone to pass through any life challenges they might encounter. Every decision made is highly important and has a high impact on every party involved. Hence, if we lose focus, get distracted, or have low endurance while making a decision, it will affect everyone. Another important quality is to be resilient and adaptive, due to the nature of customer’s behavior changing every day. One must be able to adapt to customers’ needs and behavior in time.
One thing that’s important in doing a startup and what to keep in mind while working is teamwork. The MONIXERs (how the employees are called) must be prepared to deliver the highest-quality product that will meet customers' needs. If it weren't for them, the product would not have been released. There are over 80 members who worked hard to get where the company is today.
Tyra added that, she is not afraid of failures in her life. "In the past, when making decisions, I used my intuition, and I am not afraid of failing, I embrace change and execute it. When opportunities present themselves, I am not afraid to seize them, even though I have no idea where they will lead me. There would be uncertainty or unclear things, but I am not afraid to take on that challenge. Whenever I face it, I always find a way to move forward and fight for it. I always try my best and accept the consequence if it turns out to be a mistake.”
Tyra also discussed her past failures and how she got back up again. She talked about quitting her first job. "There was a time when I was stressed out and didn't enjoy working; it also had an impact on my health. I believe the key is to recognize the mistake quickly, reflect on how you are feeling, and act quickly. At that time, I took a break. I wouldn’t call this a huge failure but looking back I found that I let my health deteriorate quickly. It was a lesson for me. From that on, I always reflect on my feelings, whether I overthink or need some rest. I don’t have any huge failure, as I don’t see it that way. I learn from my mistakes and move on."
